Mexico Economic Activity

Mexico: Economic activity maintains momentum

March 28, 2011

In January, the economy increased 5.8% over the same month last year, according to the monthly indicator for economic activity (IGAE, Indicador Global de la Actividad Economica). The reading came in above the 4.1% increase tallied in December and surprised the market on the upside, beating expectations of a 5.6% expansion. The monthly improvement was the result of faster growth in the industry and services sectors. In contrast, growth in agricultural output moderated markedly, falling from 12.5% in December to 6.6% in January. A month-on-month comparison confirms the notion of stronger growth, as the index grew a seasonally adjusted 1.16% over the previous month (December: +0.19% month-on-month). In addition, annual average growth in economic activity continues to point upwards, rising from 5.6% in December to 5.9%.

Sentiment among Mexican consumers deteriorated in January as uncertainty surrounding both NAFTA negotiations and upcoming domestic elections seemingly outweighed the effects of a tighter labor market and softer inflation.